New Quebec provincial budget reduces EV purchase incentives, while B.C.’s removes sales tax on used EVs
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Mar 30, 2022
Mehanaz Yakub

Lower electric vehicle rebates, more charging stations and support for the development of minerals for EV batteries highlight Quebec’s 2022-2023 budget. Across the country, B.C.’s budget sweetened the deal for used EV buyers

Quebec’s finance minister, Eric Girard (left), announces the province’s 2022-2023 budget. Photo: Assemblée Nationale du Québec

Lower electric vehicle rebates, more charging stations and support for the development of minerals for EV batteries highlight Quebec’s 2022-2023 budget. Across the country, B.C.’s budget sweetened the deal for used EV buyers

The Quebec government has unveiled its budget for 2022-2023, with headline items including a reduction in rebates available for the purchase of electric vehicles, new money for electric vehicle charging infrastructure and building out the province’s EV battery supply chain.

Quebec will be reducing the incentives for new battery electric vehicles (BEVs) to $7,000 from $8,000 and to $3,500 from $4,000 for used BEVs as of April 1.

For new plug-in hybrids, the government previously provided rebates calculated based on the capacity of the battery. The amounts available ranged from $500 to $8,000. Now the rebates have dropped to a maximum of $5,000.

According to the budget document, the changes in the subsidies are meant to “reflect the reduction in additional costs of electric vehicles on the market relative to comparable internal combustion models while encouraging the acquisition of vehicles with greater electric range and GHG emission reduction potential.”

The province’s EV rebates are part of its Roulez vert program, which includes a number of actions aimed at encouraging drivers to buy electric cars. Quebec’s goal is to get 1.5 million more EVs on the road by 2030. Electrification and Climate Change Support funds will pay for the continued rebate program until 2026-2027.

Holistic decarbonization

In an effort to further Quebec’s $6.7-billion 2030 Plan for a Green Economy launched in 2020, the government is earmarking an additional nearly $1 billion in this budget — on top of the original amount — to be used to reduce greenhouse gas emissions, bringing the total amount allocated for the climate plan to $7.6 billion. That money will largely come from revenue from the carbon market (Quebec operates on a cap-and-trade system), reads the budget report, and the breakdown of total funding allocation will now be in large part:

  • $3.5 billion for the transportation sector;
  • $1.3 billion for the industrial sector; and
  • $758 million for the building sector.

“Moreover, just over $1.4 billion will be invested in initiatives with other objectives
than that of reducing GHG emissions, such as adapting to climate change,” reads the report.

Other significant investments include $152 million to be spent in the energy transition, with $100 million going toward the first green hydrogen and bioenergy strategy in Quebec and $52 million going toward redesigning biofuel tax credits.

“The government has embarked on a transition aimed at giving greater priority to the use of various renewable energies. Over the coming years, green hydrogen and bioenergy will play an increasing role in the decarbonization of certain industrial sectors,” said Eric Girard, Quebec’s minister of finance during the budget speech.

“We have diversified resources and renewable electricity at a very competitive cost. Quebec, therefore, has the assets required to develop these energy transition sectors on its territory.”

Additionally, the budget will be allocating funding to bolster both Montreal and Quebec City’s municipal climate plans as well.

Montreal will get $117.2 million over the next two years to help combat climate change measures. Part of the money will go toward installing 800 public charging stations, promoting carbon neutrality in the municipal building stock by replacing fossil fuels with renewable energy and lowering greenhouse gas emissions, as well as other green infrastructure initiatives.

Meanwhile, Quebec City will get $49 million to help advance the rollout of its public charging station network by installing 95 new stations and encouraging the decarbonization of city buildings.

Critical and strategic minerals

Building on the government’s 2020 launch of a plan for the Development of Critical and Strategic Minerals 2020-2025, the new budget pledges $15 million over the next three years to directly accelerate the completion of mineral projects in Quebec and promote the development of the energy transition in renewable energy and battery manufacturing.

“We all know the importance of certain critical and strategic minerals in the manufacturing of many goods, such as electric car batteries,” said Girard.

“The Quebec Plan for the Development of Critical and Strategic Minerals 2020-2025 will help make Quebec a leader in the processing and recycling of these minerals. An investment of $15 million over three years will enhance the piloting and demonstration of processes for developing these minerals.”

An additional $7.5 million will go towards increasing research and partnerships about sustainability in the mining sector as well as support site restoration.

Finally, the line item “development of critical and strategic minerals and innovation in
the mining sector” in the supporting research and innovation section of the budget will receive an as-yet-undisclosed portion of the $1.5 billion earmarked in the budget to go towards the development of new technologies in the province.

B.C cuts sale tax on used EVs

Quebec’s budget follows the release of British Columbia’s provincial budget last month. In that document, the B.C. government added $1.2 billion in funding to its original $2.3 billion investment in the CleanBC climate action plan program (now a total of $3.5 billion), including $125 million over the next three years to advance cleaner transportation.

“Electric vehicles are another example of how we are making climate-smart decisions more affordable. B.C. leads North America in the transition to electric vehicles. To build on this momentum, Budget 2022 will continue the popular Go Electric program. And to make used EVs even more affordable, we are going to remove the PST,” said Selina Robinson, B.C’s finance minister at the budget speech.

In addition, B.C.’s Go Electric program will be getting a cash infusion of $79 million to continue providing “rebates for electric vehicle charging systems, fund hydrogen refuelling infrastructure, and support commercial vehicle pilot projects,” reads the budget report.

The budget also outlines that BC Hydro will now be taking up the responsibility from B.C’s Ministry of Energy, Mines and Low Carbon Innovation to fund and administrate Go Electric’s light-duty vehicle rebates program.

BC Hydro will use revenue from selling Low Carbon Fuel Standard credits to fund the rebate program. Since credit prices can be flexible each year depending on the market, the total funding for the program will vary each year; however, it is estimated at $249 million over three years.

And, finally, another $7 million will be given to developing a Clean Transportation Action Plan that will outline specific actions to reduce emissions in the transportation sector in B.C., while $30 million will also be made available to municipalities wanting to build more bike lanes, multi-use pathways and other active transportation infrastructure.

Editor’s Note: This story was revised to clarify that B.C.’s removal of sales tax only applies to used EVs.

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